Entrepreneur: Clover CEO Johann Vorster

It’s not often that a CEO makes headlines for scooping an Entrepreneur of the Year award. Especially if the CEO in question did not start the company from scratch.

But every now and then there are exceptions to a rule. And Clover CEO Johann Vorster is one of them.

The story of Africa’s largest dairy company began when farmers established Natal Creamery in 1899. It was later converted into a co-operative and renamed National Co-operative Dairies (NCD). For the next 70 years, NCD would operate as a supplier of raw milk and related products.

Change came when a young Vorster arrived on the dairy scene in 2000.

“They called me the disrupter,” Vorster says.

At the time NCD operated under an avalanche of debt and banks were reluctant to lend to co-operatives as they were deemed high risk.

“I got the farmers together (about 1,000) and told them we needed to change the business model. We needed to move away from just being supply driven if we were going to increase profits,” says Vorster.

Vorster’s first victory came in 2003, when NCD was converted into a public company and renamed Clover Industries.

“From there we needed to show the investment community that the model could work.”

After many meetings with farmers and shareholders, the break Vorster had spent more than a decade lobbying for finally came.

In December 2010, Clover made its debut on the JSE. Since listing at R10.50/share, the stock has surged 76% to R18.51, valuing the dairy group at R3.51bn.

Clover’s turnover rose by 56% to R9.63bn in 2015 and operating profit grew 34% to R501m.

The path to higher profits was set when Clover terminated a supply agreement with Danone. Ending that 15-year partnership enabled Clover to extract higher margins from making yoghurt, custards, desserts and fermented products that its agreement with Danone prevented it from doing.

Today, 45% of Clover’s profits are from nondairy products including ice tea, mineral water and fruit juices.

“It’s been a quite a journey,” says a chuffed Vorster. And it is one that gained him the accolade of Ernst & Young’s Entrepreneur of the Year for Southern Africa in 2015 and landed him a finalist spot at EY’s Global Entrepreneur competition held in Monaco this month.

Vorster’s plans for Africa’s dairy industry are far from over. He wants to build Africa’s first export distribution factory near Estcourt in KwaZulu Natal.

The factory will supply whey, a by-product of milk, to the baby food and medical industries mainly in Africa but also further afield.

But exporting to the rest of Africa is not without risks, as Clover is well aware. This year, the company shelved its expansion plans into Nigeria and Angola after finding tight import controls made it difficult to get products into those countries.

Last year, Clover was ranked the third-best company in SA for which to work, according to global advisory firm Deloitte.

What is next for Vorster? He says: “I am going to double the size of the business.” Asked over what time frame, he responds: “An entrepreneur doesn’t look at time, only opportunity!”